The outlook on the economy is still negative, but when compared to how things were in the past we're looking pretty damn good.  Things will get worse before they get better... much worse.  But if you look at the big picture, everything is amazing. 

I hate to say it... but I told you so.  The housing debacle is not over, home prices have another 20 to 30 percent left to fall in most places.  Home prices are still out of whack in relation to income.  Did you really think your house could double in value over a few years while household income remained relatively flat?  Exactly.  A nice fantasy, but go play Dungeons and Dragons somewhere else... this is reality.  There's a zillion unemployed people living on savings right now and the employment picture is still looking like kindergarten fingerpaint, not Picasso.  Here comes round 2.  Check out more here.

Thanks to Seeking Alpha for the below graph.

Today Bernanke said that there are "tentative signs" of an improvement in the economy, but this depends on the government's success in stabilizing shaky financial markets.  Really?  Tentative?  Do you know what that means Ben?

 ten·ta·tive
adj.
1. Not fully worked out, concluded, or agreed on; provisional 2. Uncertain; hesitant.

So he's basically saying that there are "uncertain signs" of an improving economy.  Way to go!  This is going to give the American people loads of confidence.  The fed has recently contributed $1.2 trillion into the economy... is that actually stimulating the economy or stimulating a suckers rally?  I have to believe the latter.  How am I supposed to believe Helicopter Ben? (That nickname comes from a speech in 2002, where he referenced Milton Friedman's metaphor of a helicopter dropping money on a community as a way to rescue the economy) He's been wrong before...

Remember when he said "we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system"  back in May of 2007?  Good Call Ben, good call.

Tagged in: Economy, Ben Bernanke,